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In this interview,Adetayo Adegbemle,Executive Director,PowerUp Nigeria, an electricity consumers rights and power sector advocacy group,speaks with PremiumNews on wide ranging issues in the country’s power sector.
Excerpts:
What are your concerns over the power sector almost 7years after privatization?
Of course, 7years(8yrs by November), one would have expected that promises of privatization of the power sector would have started to manifest, but rather, we see an industry that’s still fighting to find an identity, and solutions to myriad of problems that has bedeviled it for several years.
Lack of(or poor/inadequate) capital investment, inadequate power generation, poor adoption of technology, poor quality of service, low collection, and now after power sector reform, poor regulatory framework and policy implementation, have all been at the forefront of every industry experts.Political and policy direction are highly needed to put the industry in good shape
We have seen power intervention fund the Federal Government gave operators so far.Would you say there is justification for the bail out given the fact that the entities have been privatized?
In short words, No!.Privatization was meant to bring in financial investment from the private sector, bring in required expertise, but this hasn’t been what we have experienced.
Total intervention that the government has put back into the sector is even more than the value paid to buy the infrastructure.There is no justification for the bail outs
Most Nigerians are still not metered giving room for the continuation of estimated electricity billing.The National Mass Metering Programme is about to enter Phase 1.How would you assess the program,any hope of closing the huge metering gap on the long run?
This is an interesting intervention by the Federal Government ,and it is a welcomed one.NMMP might not have been able to solve all the problem, but it has become one of the most successful intervention to close up the huge metering gap that we have in Nigeria*
It might not be perfect in implementation, but it is commendable.Close observation though also points out that majority of the problem faced by the NMMP is down to the Nigerian factor.So yes, if we can sustain a program like NMMP, it may not solve 100% the Metering problem, but it will go a very long way.
NERC is said to have given directive to DisCos to begin a new service based tariff on Wednesday.What is your take on the proposed new tariff when there’s an existing agreement between the Federal Government and labour to suspend any increase in the service?
Even without NERC giving the go ahead, stakeholders, and Nigerians, should expect a review.No agreement between Federal Government and Labor can supercede the Regulatory provision of the MYTO(the MultiYear Tariff Order)
I’ve said this before, if we(Nigerians) don’t want this Tariff Order, we should go back to the Electricity Power Sector Reform(EPSR) Act and change it, that’s for the National Assembly, not even NERC, or the Federal Government
The sector is still in debt,what do you think are the best measures to solve the liquidity crisis therein?
See, the power sector has a product for sale, which is electricity. But how many Discos can tell us how many customers they’re serving?How do you even measure your profitability when you can’t measure your thorough put?The issue of Aggregate Technically , Commercial and Collection Losses still remain unaddressed.I maintain that no amount of Tariff Increase will result in a liquid and profitable industry.
The issue of corporate governance of these privatized companies also remains a big challenge, and it’s funny we are not focusing on that.You will recall that the Elrufai Committee recent asked that the Discos should be audited, did anyone ask why the Discos headed to court if there’s nothing they’re hiding?So, until these foundational issues are addresses, Consumers will continue to take the fall for an in ineffective industry
Should power firms go capital market to go raise funds to bolster their operations
Interesting proposition, and yes, this is a position I had taken earlier, but the truth is, for the Discos to go to the capital market, questions will be asked of their books. How many of these Discos do you think can open their books?
What value do you think the Petroleum Industry Act would have on the power sector?
Unless the PIA makes available free gas to the Power Sector, I don’t see any direct impact the PIA would have on the power sector.Let me also say here that our dependency on Gas as primary fuel source for the Power Sector will continue to hurt us and the industry.
Gas -to- Power still remains the most expensive grid tariff, compared to say Kanji or Shiroro(hydro).
We have witnessed incessant collapse in the power electricity grid in Nigeria.What is in the grid usual collapses and how can it be strengthened?
To a layman like me, grid Collapse is an imbalance in the frequency of voltage on the national grid. This usually occurs when a power plant shuts down(or looses input) into the grid.
One of the recommendations I have made is for us to break this grid down into regions for better management, and we can now also focus our investments, either private or even government.Breaking the grid down will also help in creating adjacent markets for the industry*
We have the examples of the American market/Grid, Brazil, Mexico, even India, that we can use as soundboards.
How can power theft be nipped in the bud in Nigeria?
Energy theft is an international phenomenon, so it is not local to the Nigerian market, with billions of Dollars to the power sector worldwide.
I have said this over and over,energy theft cannot be addressed by use of force. It needs an advocacy approach. Many of our people still see the Power Sector as Social Good, so our people needs more education and community engagement.
Discos also need to create viable platforms, and actually act on reported cases.
We have also seen cases where it is the Disco staff themselves that are involved, there is a need to show leadership from their end.There is also a concept of “Mystery Shoppers” that my organization has been trying to introduce to the Discos, we hope the Discos would appreciate that they can’t do it alone too.
Should Transmission Company of Nigeria be privatized ?
The process is as important as the result we expect from the privatization of the grid.I would expect that the grid is broken down first, and we see the results, And we can now start privatization in batches, not rushed like the Discos.
Tell us about your group.
PowerUp Nigeria is the premier electricity consumers rights and power sector advocacy organization. We have been involved in education and several policy interventions, helping communities and individuals to resolve power sector challenges.
What impact has the group had on the sector?
We have used the media to effectively engage customers in educating them of their rights, even before the regulators got around to it.We have also used our policy advocacy platform to engage policies and regulations in the power sector.*
Our popular interventions includes the removal of the fixed charges element of the billing methodology, and the popular Meter Assets Provider scheme
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